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Premier Announces Additional Cash-Flowing Royalty Purchase Agreement by its Subsidiary Premier Royalty Corp.

 Premier Announces Additional Cash-Flowing Royalty Purchase Agreement by its  Subsidiary Premier Royalty Corp.  Engages Financial Advisor  Shares Issued: 137,431,855  THUNDER BAY, ON, May 24, 2012 /CNW/ - Premier Gold Mines Limited (TSX: PG)  ("Premier") is pleased to announce the signing of a Definitive Purchase  Agreement ("the Agreement") regarding the sale by Golden Arrow Resources  Corporation ("Golden Arrow") and purchase by Premier's wholly-owned  subsidiary, Premier Royalty Corporation ("Premier Royalty"), of Golden Arrow's  1% NSR on Yamana Gold's Gualcamayo Gold mine (the "Royalty"). Pursuant to the  terms of the Agreement, Premier Royalty has agreed to purchase 100% of the  shares of Golden Arrow's wholly-owned subsidiary which indirectly owns the  Royalty for cash consideration of $16,500,000 and warrants to purchase an  aggregate of up to 1 million shares of Premier Royalty at an exercise price  equal to 120% of the price of Premier Royalty's shares in connection with an  initial public offering or similar going public transaction. The warrants will  be exercisable for a period of 24 months from the closing date of the Royalty  acquisition. Golden Arrow will have the right, on 30 days' prior written  notice, to require Premier Royalty to purchase for cancellation all  outstanding warrants for a price of $1.25 per warrant at any time prior to  their expiry.  The Closing Date of the transaction is expected to occur in the third quarter  of 2012 and is subject to closing conditions typical for a transaction of this  nature, the receipt of all necessary regulatory approvals, including the  approval of the TSX Venture Exchange and approval by the shareholders of  Golden Arrow. Golden Arrow will hold a special meeting in July, 2012 for its  shareholders to vote on the sale of the Royalty.  As in the previously announced acquisition of royalties from Aberdeen  International Inc., Premier intends to provide a bridge loan to Premier  Royalty, if required, for the Royalty purchase from Golden Arrow. The bridge  loan will be repaid by Premier Royalty with interest following a "go public"  event. Consistent with Premier's strategy to expand its portfolio of royalty  assets and maximize value for shareholders, Premier has engaged CIBC World  Markets Inc. as its financial advisor to assist in considering acquisition and  financing alternatives in relation to the Premier Royalty portfolio going  forward. Premier is planning to take Premier Royalty public during 2012.  The Gualcamayo mine is an open pit, heap leach gold mining operation with  three substantial zones of gold mineralization, located in the northern San  Juan province of Argentina, which hosts total proven & probable mineral  reserves of 2.2 million oz. and total measured & indicated mineral resources  of 1.1 million oz. as at December 31, 2011. Gualcamayo has consistently  improved its production versus guidance and is on-track to meet or exceed  guidance since 2011. According to Yamana's public disclosure, the decision was  made in 2010 to develop the underground QDD Lower West deposit, located below  the main open pit, which is expected to increase annual production to over  200,000 ounces per year beginning in 2014.  Abraham Drost, Chairman of Premier Royalty stated that "We are very pleased to  add another high quality cash-flowing royalty on a relatively new producing  gold mine operated by a proven operator, to our portfolio of royalty assets.  The Company continues to assess additional royalty acquisitions and other  corporate development opportunities as part of an ongoing effort to optimize  shareholder value. The engagement of CIBC World Markets Inc. as financial  advisor will be of considerable assistance in this regard".  Information in this press release describing the Gualcamayo Gold Mine relies  upon public disclosure provided by Yamana Gold Inc. and has been reviewed by  Mr. Stephen McGibbon, P. Geo, who is a Qualified Person within the meaning of  National Instrument 43-101. For more information on the Gualcamayo Gold  Mine, please refer to the "Technical Report for Gualcamayo Project, San Juan -  Argentina" dated March 25, 2011 which can be found on Yamana Gold's profile on  www.sedar.com.  About Premier Gold Mines Limited and Premier Royalty Corporation  Premier Royalty Corporation is a wholly-owned subsidiary of Premier Gold Mines  Limited, one of North America's leading exploration and development companies  with a high-quality pipeline of projects focused in proven, safe and  accessible mining jurisdictions in Canada and the United States. Premier's  portfolio includes significant assets in world class gold mining districts  such as Red Lake, Musselwhite and Geraldton in Ontario and the Carlin Trend in  Nevada. Premier believes that consolidating existing royalties owned by  Premier Gold combined with acquisition of other high quality cash flowing  royalty assets into Premier Royalty Corporation can form the basis of a  transaction that is value accretive to Premier shareholders.  CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release  includes certain information that may constitute "forward-looking information"  under applicable Canadian securities legislation. Forward-looking information  includes, but is not limited to, statements about strategic plans, including  the closing of the acquisition of the Royalty, a going public transaction  involving Premier Royalty, Premier issuing the bridge loan to Premier Royalty  and future acquisitions of high quality cash flowing royalty assets into  Premier Royalty. Forward-looking information is necessarily based upon a  number of estimates and assumptions that, while considered reasonable, are  subject to known and unknown risks, uncertainties, and other factors which may  cause the actual results and future events to differ materially from those  expressed or implied by such forward-looking information, including the risks  identified in Premier's annual information form under the heading "Risk  Factors". There can be no assurance that such information will prove to be  accurate, as actual results and future events could differ materially from  those anticipated in such information. Accordingly, readers should not place  undue reliance on forward-looking information. All forward-looking information  contained in this press release is given as of the date hereof and is based  upon the opinions and estimates of management and information available to  management as at the date hereof. Premier disclaims any intention or  obligation to update or revise any forward-looking information, whether as a  result of new information, future events or otherwise, except as required by  law.  Ewan Downie, President & CEO Premier Gold Mines Limited  Abraham Drost, P.Geo., Chairman Premier Royalty Corporation  Phone: 807-346-1390 Fax: 807-346-0100 e-mail:info@premiergoldmines.com Web  Site:www.premiergoldmines.com  To view this news release in HTML formatting, please use the following URL:  http://www.newswire.ca/en/releases/archive/May2012/24/c2270.html  CO: Premier Gold Mines Limited ST: Ontario NI: MNG FIN ORDER  
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